Table of Contents
- What Are Real Estate Agents and What Do They Do?
- The Different Types of Real Estate Agents
- How Much Do Starting Real Estate Agents Make?
- What Is the Average Salary for a Real Estate Agent?
- Real Estate Agent Job Considerations for Pay and Benefits
- Pros and Cons of Making a Living as a Real Estate Agent
- FAQ
According to the Bureau of Labor Statistics, the mean pay per year for a real estate agent in May 2024 was $70,970. However, agents can earn much more if they buy and sell properties in a high-income area with expensive real estate, such as New York or California, or if they build a highly successful business.
Here’s a look at what real estate agents do, the different types of agent jobs possible, how much they earn, and the factors affecting their salaries.
Key Points
• The mean yearly salary for a real estate agent in May 2024 was $70,970, according to the Bureau of Labor Statistics..
• Real estate agents earn money via commission, typically a percentage of the property’s sale price.
• Different types of real estate agents include Realtors®, brokers, listing agents, buyer’s agents, commercial agents, and residential agents.
• Factors affecting real estate agents’ salaries include location, property prices, and economic conditions.
• Experienced agents can earn higher salaries, with some areas offering much higher commission amounts due to high property values.
What Are Real Estate Agents and What Do They Do?
Real estate agents help buyers and sellers conduct transactions involving residential or commercial property. They usually work under a broker, who takes care of the management and branding of a real estate group. The real estate agent’s role is to find clients, help them search for properties, and then guide the price negotiations between the buyer and seller. In addition, they may help coordinate the legal transactions involved and prepare documentation.
Real estate agents are licensed professionals in the states where they work. The real estate agent is usually paid through commission, which is a percentage of the property’s sales price. How much commission they earn depends on the brokerage, the state, and property values. Some agents are licensed brokers, meaning they can work independently.
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The Different Types of Real Estate Agents
There are different types of real estate agents depending on their licenses and the types of property they work with. The main types of agents are Realtors®, brokers, listing agents, buyer’s agents, commercial agents, and residential agents.
Realtor®
A Realtor® is a licensed real estate agent who is a member of the National Association of Realtors® (NAR), which requires them to adhere to a code of ethics.
Broker
Brokers are licensed as such and tend to earn higher salaries and have more freedom in their career choices. They do not necessarily need to be tied to a larger brokerage firm.
Listing Agent
Listing agents are called “seller’s agents” because they represent the seller in a real estate transaction. These agents find buyers for property and try to sell a property at the highest price possible for the seller.
Buyer’s Agent
The buyer’s agent represents the buyer in a real estate transaction. They will try to find the right property for the buyer and negotiate the lowest possible price.
Commercial Agent
A commercial real estate agent primarily sells, rents, or buys commercial real estate, such as retail space, warehouses, office buildings, and industrial and mixed-use space. These agents typically know the local commercial real estate market well and might be involved in property management.
Residential Agent
A residential real estate agent primarily buys and sells homes, condos, and units in apartment complexes. They need a good grasp of the local residential real estate market, the amenities an area offers, and what type of home best suits their clients.
It’s worth noting that being a real estate agent can be a good job for a “people person” compared to a job for introverts. An agent will often have to discern a buyer’s or seller’s needs, draw them out, and spend a lot of time hand-holding clients through the ups and downs of their real estate deal.
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How Much Do Starting Real Estate Agents Make?
The entry-level salary for real estate agents reported by different sources varies. According to US Realty Training, during the first year, real estate agents can expect to make between $30,000 and $50,000.
The amount depends, of course, on many variables, not least of which is how hard the agent works and how many hours they devote to their real estate profession. The area where they work and the kinds of properties they sell will also make a difference, especially when earning commission.
Starting salaries for agents may typically be low, but according to McKissock Learning, a group that provides learning solutions for licensed real estate professionals,after three years in the field, the income of a real estate agent could triple from the first year. The longer you work as an agent and develop a clientele, the higher your salary might be.
Also, consider the cost of living and housing prices where a real estate agent works. Real estate agents typically earn money via commission (say, 5% of the property’s sale price, which may be divided between a couple of agents, such as the listing agent and the buyer’s agent). This can make a tremendous difference: One real estate agent might be selling homes in the range of $300k, while another might sell multi-million dollar waterfront homes in Hawaii. The latter will likely earn much more competitive pay.
What Is the Average Salary for a Real Estate Agent?
How much does a real estate agent make a year? According to the Bureau of Labor Statistics, the mean yearly salary for a real estate agent in May 2024 was $70,970, while real estate brokers earned a mean annual salary of $91,660. Salaries will vary depending on where an agent works (the state), their licenses, and how hard they work.
How much does a real estate agent make per sale? This factor is critical in determining their income. An agent who works in New York City, prime areas of Los Angeles or Palo Alto, or Hawaii will likely earn a higher net commission per sale because average property prices in those areas are high. (For the very high-end professionals, being a real estate agent could be among the highest paid jobs per state.) Because agents earn more the more properties they sell, how much time they spend on their business can also be a major factor affecting their earnings.
The table below shows the average real estate agent salary as of May 2024 (the most recent year available) based on data from the Bureau of Labor Statistics.
| State | Real Estate Agent Mean Wage |
|---|---|
| Alabama | $55,450 |
| Alaska | $87,000 |
| Arizona | $68,570 |
| Arkansas | $51,440 |
| California | $76,220 |
| Colorado | $71,880 |
| Connecticut | $59,800 |
| Delaware | $62,190 |
| District of Columbia | $70,420 |
| Florida | $73,330 |
| Georgia | $68,030 |
| Hawaii | $62,950 |
| Idaho | $45,880 |
| Illinois | $57,560 |
| Indiana | $70,900 |
| Iowa | $46,070 |
| Kansas | $76,520 |
| Kentucky | $52,420 |
| Louisiana | $49,960 |
| Maine | $70,410 |
| Maryland | $60,630 |
| Massachusetts | $93,450 |
| Michigan | $63,660 |
| Minnesota | $70,080 |
| Mississippi | $65,060 |
| Missouri | $48,200 |
| Montana | $82,330 |
| Nebraska | $52,370 |
| Nevada | $65,970 |
| New Hampshire | $67,780 |
| New Jersey | $79,370 |
| New Mexico | $83,760 |
| New York | $104,320 |
| North Carolina | $61,480 |
| North Dakota | $72,710 |
| Ohio | $54,010 |
| OKlahoma | Estimate not released |
| Oregon | $62,770 |
| Pennsylvania | $63,210 |
| Puerto Rico | $82,380 |
| Rhode Island | $62,570 |
| South Carolina | $72,750 |
| South Dakota | $63,160 |
| Tennessee | Estimate not released |
| Texas | $73,360 |
| Utah | $58,350 |
| Vermont | $100,490 |
| Virginia | $68,100 |
| Washington | $81,390 |
| West Virginia | $69,610 |
| Wisconsin | $68,460 |
| Wyoming | $55,580 |
Real Estate Agent Job Considerations for Pay and Benefits
There are, as you might guess, an array of factors that contribute to a real estate agent’s pay and career opportunities. Consider the following points.
The Cost of Becoming Licensed
Pre-licensing real estate classes may cost around $150 to $700. These classes are necessary to prepare for the real estate exam, which, with related fees, may also add up to a few hundred dollars.
An established agent may also have to pay brokerage fees. The broker may take a commission on an agent’s real estate earnings or charge a monthly fee.
Marketing Costs
A realtor must likely market their services, and a common rule of thumb for what to spend on those costs is around 10% of commission income. It could also cost more at the outset as the agent builds their brand and presence in the area they intend to work in. Or, as a real estate agent builds their client base, they might upgrade and begin to invest more in videos and social media to boost their profile.
Initially, an agent may do better working under a brokerage. A brokerage already has a customer base to draw from and an established brand name that will help its agents’ reputations. A brokerage will expect some payment in return, but it could be a valuable partnership.
Economic Conditions
The real estate market is infamous for its volatility. In a “hot” market, properties can sell quickly at high prices (often elevated by bidding wars), and estate agents can earn high commissions.
However, in times of recession, homes sit on the market longer, prices can slump, and real estate agents may earn much less.
Because most people buy a home using a mortgage loan, interest rates heavily influence the market. High interest rates deter people from borrowing and slow down the real estate market.
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Pros and Cons of Making a Living as a Real Estate Agent
A real estate agent is often an entrepreneur. That means they are in control of their business, but how much they earn depends on how much time they put in, their expertise and creativity, and other factors.
Here are some advantages and disadvantages of making a living as a real estate agent.
| Pros of Making a Living as a Real Estate Agent Real | Cons of Making a Living as a Real Estate Agent |
|---|---|
| As entrepreneurs, agents are in control of their day. | An agent’s income can be irregular and depends on economic and market conditions. |
| Agents can set their own schedules and work as much or as little as they like. | Income may be limited by the area where the agent works and the types of property available. |
| A commission-based salary can be lucrative if an agent works in the right area and the market is favorable. | Real estate agents often work weekends and evenings to accommodate clients’ needs. |
The Takeaway
The typical real estate agent’s salary averages $70,970, according to data from the Bureau of Labor Statistics. However, that figure can vary greatly depending on where an agent works, their skill, and how hot the market is. Agents in major cities and who specialize in luxury properties can do very well.
When working as a real estate agent, it’s important to balance such concerns as marketing, building your client base, and adjusting to fluctuating economic conditions. These and other factors can impact cash flow, for better or for worse.
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FAQ
How can you make $100,000 your first year in real estate?
It’s possible to make $100,000 a year in real estate or put together enough deals to take in that amount of income. Factors that will help include working in an area where house prices are high, setting a strategy, and marketing your services well to generate leads.
How much do Realtors® make in California?
The mean salary per year for real estate agents in California as of May 2024 was $76,220, according to the Bureau of Labor Statistics, compared to the national mean of $70,970. Realtors in California may earn more than the national average because property prices are often high, which leads to higher commissions on sales.
How much money does a real estate agent make a year?
How much a real estate agent earns in a year will depend on where and how they are licensed, the number of clients they represent, and the property prices in their area. According to the Bureau of Labor Statistics, the mean salary for a real estate agent in May 2024 was around $70,970, while real estate brokers earned a mean salary of $91,660.
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